CONTENTS. ANNUAL REPORT 2016 ISR Capital Limited 1

ANNUAL REPORT 2016

CONTENTS 2 4 6 7 8 26 28 31 33 34 35 37 39 86 88 LETTER TO SHAREHOLDERS DIRECTORS PROFILES FINANCIAL HIGHLIGHTS CORPORATE INFORMATION CORPORATE GOVERNANCE STATEMENT REPORT OF THE AUDIT COMMITTEE STATEMENT BY DIRECTORS INDEPENDENT AUDITOR S REPORT CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME STATEMENTS OF FINANCIAL POSITION CONSOLIDATED STATEMENT OF CHANGES IN EQUITY CONSOLIDATED STATEMENT OF CASH FLOWS NOTES TO THE FINANCIAL STATEMENTS SHAREHOLDERS STATISTICS AND DISTRIBUTION NOTICE OF ANNUAL GENERAL MEETING PROXY FORM ANNUAL REPORT 2016 ISR Capital Limited 1

LETTER TO SHAREHOLDERS Dear Shareholders, I am honoured to present you the annual report for ISR Capital Limited ( ISR Capital or the Company ) for the financial year ended 31 December 2016 ( FY2016 ). This year s report marks my first time writing to you as the Executive Chairman of ISR Capital, following my re-designation on 18 November 2016. FY2016 was an eventful and challenging year for the Company, during which we initiated the proposed acquisition of a 60%-stake in Tantalum Holding (Mauritius) Ltd ( THM ), which owns 100% of Tantalum Rare Earth Malagasy S.A.R.L. ( TREM ) (collectively, the Madagascar Asset ). TREM holds a concession for a rare earth oxide resource in Madagascar, an island located off the south-eastern coast of Africa. As announced on 5 September 2016, I became a shareholder of the Company following the signing of share placement agreements between the Company and four subscribers myself included to raise gross proceeds of S$12 million for the acquisition. Financial Frontiers Pte. Ltd., Mr Lee Thiam Seng, Mdm Ong Siew Choo, and I have to date collectively invested S$6.0 million via the first of a two-tranche share placement. On 26 September 2016, ISR Capital entered into a short-term secured bridging loan facility agreement with THM via its wholly-owned subsidiary, ISR Global Pte. Ltd. ( ISR Global ), to loan THM up to S$6.0 million for the Madagascar Asset s working capital requirements. To date, a total of S$3.47million (US$2.5 million) has been loaned to THM. Rare earth oxides possess unique magnetic, luminescent and electrochemical properties which make specialised high-tech metal products lighter, smaller, more durable and more energy-efficient. They are included in specialised magnets used for electric vehicles, which are increasingly popular, as well as components for aerospace or satellite components. The People s Republic of China ( PRC ) is one of the few nations currently capable of mining rare earths on an industrial scale, and recently announced plans to limit national output to 140,000 tonnes by 2020. This will potentially result in a significant shortage as demand for these materials continues to rise globally. The Madagascar Asset holds a 300 square-kilometre concession on the west coast of Madagascar, which is considerably larger than existing rare earth concessions in the PRC. It will also be the only known ionic clay mine with rare earth potential outside the PRC. ISR Capital commissioned two valuation reports on the Madagascar Asset in FY2016, both of which value the concession at over US$1.0 billion. We are currently commissioning a third valuation report to address certain issues which were raised by the Singapore Exchange in November 2016, and will update shareholders in due course. We are also in active dialogues with potential partners to lay the groundwork for possible offtake agreements once we complete the acquisition of THM. The Company remains deeply committed to completing the acquisition, the injection of the Madagascar concession into ISR Capital, and thereafter extracting rare earths in a responsible manner which will generate returns for our shareholders. 2 ISR Capital Limited ANNUAL REPORT 2016

LETTER TO SHAREHOLDERS Board and Executive Changes I was first appointed as Non-Independent Non-Executive Director on 27 October 2016, and was re-designated as Executive Chairman of ISR Capital on 18 November 2016. Mr Lee Ka Shao has been appointed as Independent Non-Executive Director of the Company, Chairman of the Nominating and Remuneration Committees as well as a member of the Audit Committee, effective 3 January 2017. Mr Lin, Chen Hsin has been appointed as Independent Non-Executive Director of the Company, as well as a member of the Audit and Remuneration Committees, effective 8 March 2017. Datuk Md Wira Dani bin Abdul Daim resigned as Executive Chairman of the Company with effect from 15 August 2016. Ms Quah Su Yin resigned as Chief Executive Officer and Executive Director of the Company with effect from 31 December 2016. Mr David Francis Rigoll resigned as Executive Director of the Company with effect from 6 March 2017. Mr Levin Lee Keng Weng resigned as Independent Non-Executive Director of the Company with effect from 3 December 2016. Dato Seri Krishna Kumar Sivasubramaniam resigned as Independent Non-Executive Director of the Company with effect from 28 November 2016. Appreciation On behalf of the Board, I would like to extend a warm welcome to the new directors, and look forward to working with them to lead ISR Capital into a new phase of growth. To those who have left us, we thank them for their invaluable contributions and we wish them all the best in their future endeavours. Chen Tong Executive Chairman ANNUAL REPORT 2016 ISR Capital Limited 3

DIRECTORS PROFILES Mr Chen Tong Executive Chairman and Executive Director Mr Chen Tong, aged 52, is our Executive Chairman and he is a member of the Nominating Committee. He was appointed to the Board as Non-Independent Non-Executive Director on 27 October 2016 and was subsequently re-designated as Executive Chairman of ISR Capital Limited on 18 November 2016. He comes with over 30 years experience in metallurgical mining and investments. Mr Chen, a Singapore national, has been involved in developing mineral resources assets and businesses in China, Australia, Canada, South Africa and the ASEAN region over the last 10 years and has developed good relations with many large mining enterprises. Mr Chen Tong graduated with a Master of Engineering (majoring in Metallurgy) from Shanghai University and a Bachelor of Engineering (majoring in Thermal Engineering) from Beijing University of Science and Technology. Mr Kwok Wei Woon Lead Independent Director Mr Kwok Wei Woon, aged 43, is our Lead Independent Director and our Chairman for Audit Committee. He was appointed to the Board on 14 May 2012 and is also a member of the Remuneration Committee and Nominating Committee. Joseph is currently the Deputy General Manager of SooChow Securities CSSD (Singapore) Pte Ltd, a licensed fund manager in Singapore that is 75% owned by SooChow Securities and 25% by China-Singapore Suzhou Industrial Park Development Co. Ltd. He is also a director of China Reform Overseas Management Co Ltd and China Reform Puissance Overseas Holdings Limited; an Independent Non-Executive Director of two other SGX main-board listed companies, CWG International Ltd (formerly known as Chiwayland International Limited) and Asia Fashion Holdings Limited. He has more than 18 years of experience in the financial services industry and had previously held senior roles with global financial institutions like JP Morgan (Executive Director); UBS AG (Director, Advisory Consultant, North Asia); Standard Chartered Bank Singapore (Deputy GM, Wealth Management). Joseph is Fellow of SIM University and an adjunct lecturer with Kaplan teaching finance and business related subjects. In addition, he also volunteers in non-profit organisations and is currently President of Financial Planning Association of Singapore (FPAS); President of University Of New South Wales Alumni Association Singapore; Audit Committee Chairman of Singapore Gymnastics; member of the fund raising committee of NTUC Employee Training Fund (NETF). Joseph graduated with a Master Of Commerce degree (majoring in advance finance) and a Bachelor of Commerce degree (majoring in Accounting and Finance) from University of New South Wales. He is a certified accountant with CPA Australia and a Certified Financial Planner (CFP). 4 ISR Capital Limited ANNUAL REPORT 2016

DIRECTORS PROFILES Mr Lee Ka Shao Independent Director Mr Lee Ka Shao, aged 47, was appointed on 3 January 2017 as our Independent Director and he is the Chairman of the Nominating Committee and Remuneration Committee and a member of the Audit Committee. Mr Lee, a Singaporean, is a 23-year veteran in the banking and finance industry who had built and managed businesses in major financial institutions spanning trading, investment management, corporate finance and solution structuring across broad asset classes in U.S., Europe and Asia. He currently manages a family office. Prior to that he co-founded and was the chief investment officer of Cavenagh Capital, a global macro strategy hedge fund with offices in Amsterdam and Singapore; and before that was a founding member of Abax Global Capital, a special situations hedge fund based in Hong Kong. Mr Lin, Chen Hsin Independent Director Mr Lin, Chen Hsin, aged 74, was appointed to the Board on 8 March 2017 as our Independent Director and he is a member of the Audit Committee and Remuneration Committee. Mr Lin holds the position of Administration Director of Coastal International Holdings Ltd since 1997 and between 1997 to 2012, he was appointed as Executive Director of Coastal Greenland Limited, an investment holding company that is principally engaged in the property related business and is listed on the Hong Kong Stock Exchange. In addition, he also has over 20 years experience in import and export trading and manufacturing. Mr Lin graduated from the Shanghai Institute of Education in 1965. Preceding that, Mr Lee established and managed an internal absolute returns fund on the shareholders equity of DBS Bank group and also advised on DBS s asset and liability management as the Managing Director in Central Treasury. Mr Lee started his career on Wall Street with J.P. Morgan as a market maker and proprietary trader in foreign exchange, interest rates and derivatives. He also established and headed a structuring group to offer innovative solutions in the post Asian financial crisis economic meltdown in 1998 where markets were wrecked with capital controls, illiquidity and other impediments when governments, corporates and financial institutions in Asia needed financing and hedges while global investors and funds were looking to make investment inroads into Asia. Mr Lee is also currently an Independent Director of Asia Fashion Holdings Limited, which is listed on the Mainboard of Singapore Exchange Securities Trading Limited ( SGX-ST ). Mr Lee graduated with honours in Economics from the National University of Singapore. ANNUAL REPORT 2016 ISR Capital Limited 5

FINANCIAL HIGHLIGHTS 2016 2015 Increase/ (Decrease) (S$ '000) (S$ '000) (%) Consolidated Statement of Profit or Loss and Other Comprehensive Income Revenue (from continuing operations) 350 2,995 (88.3) Total (loss)/profit (8,277) 667 (1,340.9) Balance Sheets Total Assets 5,185 5,754 (9.9) Total Liabilities 553 2,747 (79.9) Total Equity 4,631 3,007 54.0 2016 2015 Increase/ (Decrease) (%) (%) (%) Ratios Return On Equity (178.7) 22.2 (905.8) Return On Assets (159.6) 11.6 (1,477.5) 2016 2015 Increase/ (Decrease) (cents) (cents) (%) Per Ordinary Share Basic (loss)/earnings per share (0.72) 0.27 (366.7) Diluted (loss)/earnings per share (0.72) 0.12 (416.7) 6 ISR Capital Limited ANNUAL REPORT 2016

CORPORATE INFORMATION BOARD OF DIRECTORS Chen Tong Executive Chairman and Executive Director Kwok Wei Woon Lead Independent Director Lee Ka Shao Independent Director Lin, Chen Hsin Independent Director AUDIT COMMITTEE Kwok Wei Woon Chairman Lee Ka Shao Lin, Chen Hsin NOMINATING COMMITTEE Lee Ka Shao Chairman Chen Tong Kwok Wei Woon REMUNERATION COMMITTEE Lee Ka Shao Chairman Lin, Chen Hsin Kwok Wei Woon REGISTERED OFFICE 83 Clemenceau Avenue #10-03 UE Square Singapore 239920 T: (65) 6319 4999 F: (65) 6319 4980 www.isrcap.com AUDITORS RT LLP 1 Raffles Place #17-02 One Raffles Place Singapore 048616 Partner-in-charge: Su Chun Keat (Appointed in Financial Year 2015) SHARE REGISTRAR Tricor Barbinder Share Registration Services (A division of Tricor Singapore Pte. Ltd.) 80 Robinson Road #02-00 Singapore 068898 COMPANY SECRETARIES Vincent Lee Chung Ngee Teo Meng Keong Tan Wee Sin ANNUAL REPORT 2016 ISR Capital Limited 7

CORPORATE GOVERNANCE STATEMENT INTRODUCTION The Board of Directors (the Board ) of ISR Capital Limited (the Company ) is committed to uphold good corporate governance within the Company and its subsidiaries (the Group ). This commitment to corporate governance is seen in their continuous support of the Code of Corporate Governance in their effort to observe high standards of transparency, accountability and integrity in managing the Group s business in order to create value for its stakeholders and safeguard the Group s assets. This Statement describes the practices which the Company has taken with respect to each of the principles and guidelines and the extent of its compliance with the revised Code of Corporate Governance 2012 (the Code ) during the financial year ended 31 December 2016 ( FY2016 ). Where there are deviations from the Code, appropriate explanations will be provided. BOARD MATTERS The Board s Conduct of Affairs Principle 1: Every company should be headed by an effective Board to lead and control the company. The Board is collectively responsible for the success of the Company. The Board works with Management to achieve this and the Management remains accountable to the Board. The Company is headed by an effective Board, comprising competent individuals with diversified background and collectively brings with them a wide range of experience, to lead and control the Company. The Board s principal functions are: Setting the strategic directions and long-term goals of the Group and ensuring that adequate resources are available to meet these objectives; Reviewing and approving financial policies, investments and divestment proposals and major funding proposals; Reviewing and approving the Group s annual business plan including the annual budget, capital expenditure and operational plans; Reviewing and evaluating the adequacy and integrity of the Group s internal controls, risk management and financial reporting system; Identifying the key stakeholder groups and recognise that their perceptions affect the Company s reputation; Considering sustainability issues including environmental and social factors in the formulation of the Group s strategies; and Ensuring accurate and timely reporting in communication with shareholders. To assist in the execution of its responsibilities, the Board has established an Audit Committee ( AC ), Nominating Committee ( NC ) and Remuneration Committee ( RC ). These committees function within clearly defined terms of references and operating procedures, which are reviewed on a regular basis. The effectiveness of these committees is also constantly reviewed by the Board. The roles and responsibilities of the AC, NC and RC are provided for in the later sections of this Corporate Governance Statement. The full Board meets on a regular basis and as when necessary, to address any significant matters that may arise. As provided for under Article 97 of the Company s Constitution, the Directors of the Company may participate in any meeting of Directors by means of a conference telephone, video conferencing, audio visual or other similar communications equipment by means of which all persons participating in the meeting can hear each other. 8 ISR Capital Limited ANNUAL REPORT 2016

CORPORATE GOVERNANCE STATEMENT The number of Board and Board Committee meetings held during FY2016 and the attendance of each Director where relevant is as follows: Type of meetings Board AC NC RC No. of meetings held in FY2016 7 5 3 2 Attendance Mr Chen Tong (1) 3/3 N/A 1/1 N/A Mr Kwok Wei Woon 7/7 5/5 3/3 2/2 Mr Lee Ka Shao (2) N/A N/A N/A N/A Mr Lin, Chen Hsin (3) N/A N/A N/A N/A Mr David Francis Rigoll (4) 3/5 N/A N/A N/A Ms Quah Su-Yin (5) 7/7 N/A N/A N/A Mr Levin Lee Keng Weng (6) 4/5 4/5 N/A 2/2 Dato Seri Krishna Kumar Sivasubramaniam (7) 4/5 3/5 2/2 2/2 Datuk Md. Wira Dani Bin Abdul Daim (8) 4/4 N/A 2/2 N/A N/A Not applicable (1) Mr Chen Tong was appointed as Non-Independent Non-Executive Director on 27 October 2016. He was subsequently re-designated as Executive Chairman and a member of Nominating Committee on 18 November 2016. (2) Mr Lee Ka Shao was appointed as Independent Non-Executive Director, Chairman of Nominating Committee and Remuneration Committee and a member of Audit Committee on 3 January 2017. (3) Mr Lin, Chen Hsin was appointed as Independent Non-Executive Director, and a member of Audit Committee and Remuneration Committee on 8 March 2017. (4) Mr David Francis Rigoll was appointed as Non-Executive Director on 16 May 2016. He was subsequently re-designated as Executive Director on 16 June 2016 and resigned as Executive Director on 6 March 2017. (5) Ms Quah Su-Yin resigned as Chief Executive Officer and Executive Director on 31 December 2016. (6) Mr Levin Lee Keng Weng was appointed as Independent Non-Executive Director and a member of Audit Committee and Remuneration Committee on 1 February 2016. He was subsequently re-designated as Chairman of Remuneration Committee on 25 February 2016. He resigned as Independent Non-Executive Director, Chairman of Remuneration Committee and a member of Audit Committee on 3 December 2016. (7) Dato Seri Krishna Sivasubramaniam resigned as Independent Non-Executive Director, Chairman of Nominating Committee and a member of Audit and Remuneration Committees on 28 November 2016. (8) Datuk Md. Wira Dani Bin Abdul Daim resigned as Executive Chairman and Executive Director and a member of Nominating Committee on 15 August 2016. The Board has identified the following areas for which the Board has direct responsibility for decision making: Approving the Group s major investments and funding decisions; Approving the Group s half-year and full-year results announcements for release via the SGXNET in accordance to the Listing Rules of the Singapore Exchange Securities Trading Limited ( SGX-ST ); Approving annual report and audited financial statements; Convening of shareholders meetings; Approving corporate strategies; Approving corporate or financial restructuring; Approving annual management plans and budgets; and Approving of material acquisitions and disposal of assets. While matters relating to the Group s objectives, strategies and policies require the Board s decision and approval, Management is responsible for the day-to-day operations and administration of the Group. ANNUAL REPORT 2016 ISR Capital Limited 9

CORPORATE GOVERNANCE STATEMENT Upon appointment, each Director will receive appropriate training to ensure that the Director is familiar with the Group s business, financial performance and governance practices. Newly appointed Directors will receive a formal appointment letter setting out their duties and obligations. The Directors are continuously updated with the changes to relevant laws, regulations, changing commercial risks and accounting standards. To enable the Directors to remain updated with the relevant laws and corporate governance practices, the Company continues to facilitate and make arrangements for the Directors to participate in industry conferences and seminars, and attend relevant training courses, where required. During the year, the Board was briefed and updated on the impending statutory and regulatory changes as well as the new/revised financial reporting standards that are applicable for FY2016 and beyond, including the key enhancements to the auditor s report. All Directors are encouraged to constantly keeping abreast of developments in regulatory, legal and accounting frameworks that are of relevance to the Group through the extension of opportunities for participation in the relevant training courses, seminars and workshops as relevant and/or applicable. Board Composition and Guidance Principle 2: There should be a strong and independent element on the Board, which is able to exercise objective judgment on corporate affairs independently, in particular, from Management and 10% shareholders. No individual or small group of individuals should be allowed to dominate the Board s decision making. The Board consists of four (4) members comprising the Executive Chairman and three (3) Independent Non-Executive Directors. As Independent Directors make up more than half of the Board, there is a strong independent element on the Board and no individual or groups of individuals are able to dominate the Board s decision-making process. The Independent Directors provide the Board with independent and objective judgment on the corporate affairs of the Group. They have the necessary experience to assist the Board in decision making and to provide a check and balance to the Board as they are not involved in the day-to-day operations of the Company. The profile of each Director is presented on pages 4 to 5 of this Annual Report. On an annual basis and upon notification by an Independent Director of a change in circumstances, the NC will review the independence of each Independent Director based on the criteria for independence as defined in the Code and recommends to the Board as to whether the Director is considered to be independent. The Board examines its size and after taking into account the scope and nature of the Company s operations as well as the diversified background and experience of the Directors that provide core competencies in areas such as finance, accounting, business management, industry knowledge and strategic planning experience, is satisfied that the Board is of an appropriate size to facilitate effective decision making. None of the Independent Directors have served on the Board beyond nine (9) years from their respective date of appointment. The Non-Executive Directors constructively review and assist the Board to facilitate and develop proposals on strategy and review the performance of Management in meeting agreed objectives and monitor the reporting performance. On the effectiveness, the Independent Directors have full access and co-operation from the Company s Management and officers. The Independent Directors have full discretion to have separate meetings and invite any Directors or officers to the meetings and to meet without the presence of Management as and when warranted by certain circumstances. 10 ISR Capital Limited ANNUAL REPORT 2016

CORPORATE GOVERNANCE STATEMENT Chairman and Chief Executive Officer Principle 3: There should be a clear division of responsibilities between the leadership of the Board and the executives responsible for managing the Company s business. No one individual should represent a considerable concentration of power. Mr Chen Tong was appointed as a Non-Independent Non-Executive Director of the Company on 27 October 2016 and re-designated as an Executive Chairman on 18 November 2016. He is responsible for the effective conduct of the Board as well as directing the Group s overall strategy and growth. The Chairman ensures that Board meetings are held on a regular basis and sets Board meeting agenda for each meeting in consultation with the Directors, the Management and the Company Secretary as and when necessary. The Chairman and the Directors ensure that Board members are provided with complete, adequate and timely information on a regular basis to enable them to be fully cognisant of the affairs of the Group. The Chairman should: (a) (b) (c) (d) (e) (f) (g) (h) lead the Board to ensure its effectiveness on all aspects of its role; set the agenda and ensure that adequate time is available for discussion of all agenda items, in particular strategic issues; promote a culture of openness and debate at the Board; ensure that the Directors receive complete, adequate and timely information; ensure effective communication with shareholders; encourage constructive relations within the Board and between the Board and Management; facilitate the effective contribution of Non-Executive Directors in particular; and promote high standards of corporate governance. For good corporate governance, Mr Kwok Wei Woon has been appointed as the Lead Independent Director of the Company. Shareholders of the Company with serious concerns that could have a material impact on the Group, for which contact through the normal channels of the Chairman, the Directors or Group Financial Controller have failed to resolve or is inappropriate, would be able to contact Mr Kwok or the Audit Committee members of the Company. Board Membership Principle 4: There should be a formal and transparent process for the appointment and re-appointment of directors to the Board. The Company had established a Nominating Committee to make recommendations to the Board on all board appointments. The NC comprises the following three (3) Directors, a majority of whom including the Chairman of the NC, are Independent Non-Executive Directors: 1. Mr Lee Ka Shao (Chairman) 2. Mr Kwok Wei Woon 3. Mr Chen Tong The NC is governed by the NC s Terms of Reference which describes the duties and functions of the NC. ANNUAL REPORT 2016 ISR Capital Limited 11

CORPORATE GOVERNANCE STATEMENT The duties and functions of the NC are as follows: (a) (b) (c) (d) (e) (f) (g) to make recommendations to the Board on all board appointments, including re-nominations, having regard to the Director s competencies, commitment, contributions and performance (for example attendance, preparedness, participation, candour and others); to determine annually whether a Director is independent; where a Director has multiple board representations, to decide whether a Director is able to and has adequately carried out his duties as Director, having regard to the competing time commitments that are faced when serving on multiple boards; to decide how the Board s performance may be evaluated and propose objective performance criteria that allow comparison with industry peers, for approval by the Board, and that address how the Board has enhanced longterm shareholders value; to review the structure, composition and size of the Board; to review board succession plan; and to determine the appropriate training and professional development program for the Board. The Company s Constitution provides that at each Annual General Meeting ( AGM ), one-third (1/3) of the Directors for the time being, or if their number is not a multiple of three (3), the number nearest to one-third (1/3) but not less than one-third (1/3) shall retire by rotation and that all the Directors (other than a Director holding the office as Managing Director) shall retire by rotation at least once every three (3) years and such retiring Director shall be eligible for re-election. Where a vacancy arises, the NC will consider each candidate for directorship based on the selection criteria determined after consultation with the Board and after taking into consideration the qualification and experience of such candidate, his/her ability to increase the effectiveness of the Board and to add value to the Group s business in line with its strategic objectives, the NC will recommend the candidate to the Board for approval. Under the Company s Constitution, a newly appointed Director shall retire at the AGM following his/her appointment and he/she shall be eligible for re-election. At the forthcoming AGM, Mr Chen Tong, Mr Lee Ka Shao and Mr Lin, Chen Hsin will retire pursuant to Article 88 of the Company s Constitution. As at the date of this Report, the Board comprises four (4) Directors. Details of the Directors qualifications, initial appointment, last re-election and their directorship are as follows: Name of Director Position Date of initial appointment Date of last re-election Academic and professional qualifications Present Directorship in other listed Companies Past Directorship in other listed Companies Mr Chen Tong Executive Chairman 27 October 2016 N/A 1. Master of Engineering (Metallurgy) 2. Bachelor of Engineering (Thermal Engineering) N/A N/A 12 ISR Capital Limited ANNUAL REPORT 2016

CORPORATE GOVERNANCE STATEMENT Name of Director Mr Kwok Wei Woon Mr Lee Ka Shao Mr Lin, Chen Hsin Position Lead Independent Director Independent Non-Executive Director Independent Non-Executive Director Date of initial appointment Date of last re-election 14 May 2012 29 April 2016 3 January 2017 8 March 2017 N/A N/A Academic and professional qualifications 1. Master of Commerce (Advance Finance) 2. Bachelor of Commerce (Accounting and Finance) 3. CPA (CPA Australia) 4. Certified Financial Planner 1. Bachelor of Arts 2. Bachelor of Social Sciences Shanghai Institute of Education Present Directorship in other listed Companies 1. Asia Fashion Holdings Limited 2. CWG International Ltd (formerly known as Chiwayland International Limited) Asia Fashion Holdings Limited N/A Past Directorship in other listed Companies N/A N/A Coastal Greenland Limited* (from year 1997 to 2012) * Listed on Hong Kong Stock Exchange The NC had recommended to the Board that Mr Chen Tong, Mr Lee Ka Shao and Mr Lin, Chen Hsin be nominated for re-election at the forthcoming AGM. In making the recommendation, the NC had considered the Directors overall contributions and performance. The NC has considered and taken the view that it would not be appropriate to set a limit on the number of directorships that a Director may hold because directors have different capabilities, the nature of the organisations in which they hold appointments and the committees on which they serve are of different complexities, and accordingly, each Director would personally determine the demands of his competing directorships and obligations and assess the number of directorships they could hold and serve effectively. Currently, none of the Directors hold more than five (5) directorships in other listed companies. During the financial year under review, the NC is satisfied that sufficient time and attention are being given by the Directors to the affairs of the Group, notwithstanding that some of the Directors have multiple board representations, and there is presently no necessity to implement internal guidelines to address their competing time commitments. The NC is also of opinion that the current board size is adequate for the effective function of the Board. In regard to the independence of the Directors, the NC has affirmed that all the three (3) Independent Directors are independent and free from any relationship outlined in the Code. Each of the Independent Directors has also confirmed his independence. The Company does not have any alternate Directors as the Board does not encourage the appointment of alternate Directors unless in exceptional cases. ANNUAL REPORT 2016 ISR Capital Limited 13

CORPORATE GOVERNANCE STATEMENT Board Performance Principle 5: There should be a formal assessment of the effectiveness of the Board as a whole and its board committees and the contribution by each director to the effectiveness of the Board. The Board has implemented a process in which NC will coordinate a formal assessment of the effectiveness of the Directors and the Board Committees. On an annual basis, the NC in consultation with the Chairman of the Board, will review and evaluate the performance of the Directors and the Board as a whole. Each Director is invited to complete a Board Assessment Checklist to appraise the performance and contributions of the Directors, including the Chairman of the Board. This includes taking into consideration the attendance record at the meetings of the Board and Board Committees and also the contributions of each Director to the effectiveness of the Board. The completed Board Assessment Checklist is then submitted for compilation and the NC will assess the results of the questionnaire and report key findings to the Board. The NC has assessed the Board s performance to-date and is of the view that the performance of the Board as a whole is satisfactory. The NC is satisfied that despite some of the Directors having board representations in other listed companies, the Directors are able to and have adequately carried out their duties as Directors of the Company. Each member of the NC shall abstain from voting on any resolutions and making any recommendation and/or participating in any deliberations of the NC in respect of the assessment of his performance or re-nomination as a Director. Access to Information Principle 6: In order to fulfill their responsibilities, directors should be provided with complete, adequate and timely information prior to board meetings and on an on-going basis so as to enable them to make informed decisions to discharge their duties and responsibilities. The Board has separate and independent access to the senior management and external auditors of the Group at all times. Request for information is dealt with promptly by Management. The Board is informed of all material events and transactions as and when they occur. The information made available to the Directors are in various forms such as quarterly, half-yearly and full-year financial results, progress reports of the Group s operations, corporate developments, regulatory updates, business developments and audit reports. Management also consults with Board members regularly and whenever necessary and appropriate. The Board is issued with Board papers timely prior to Board meetings. Management s proposals to the Board for approval include background and explanatory information such as facts, resources needed, risk analysis and mitigation strategies, financial impact, regulatory implications, expected outcomes, conclusions and recommendations. Employees who can provide additional insight into matters to be discussed will be present at the relevant time during the Board and Board Committee meetings. In order to keep Directors abreast of the Group s operations, the Directors are also updated on initiatives and developments on the Group s business as soon as practicable and/or possible and on an on-going basis. The Directors also have separate and independent access to the company secretaries. The roles of the company secretaries are to administer, attend and prepare minutes of Board meetings, assist the Chairman in ensuring that Board procedures are followed and reviewed so that the Board functions effectively and the Company s Constitution, Listing Manual of the SGX-ST and other relevant rules and regulations applicable to the Company are complied with. The company secretary also attends all Board meetings. The appointment and removal of the company secretaries are decided by the Board as a whole. 14 ISR Capital Limited ANNUAL REPORT 2016

CORPORATE GOVERNANCE STATEMENT A calendar of activities is scheduled for the Board a year in advance, with Board papers and agenda items dispatched beforehand to Directors, with sufficient lead-time for Directors to peruse, review and consider the items tabled at the relevant Board meetings so that the discussions at such meetings can be more meaningful and productive. The Board in fulfilling its responsibilities as a group or individually, when deemed fit, direct the Company, at the Company s expense, to appoint an independent professional adviser, to render professional advice.. REMUNERATION MATTERS Procedures for developing remuneration policies Principle 7: There should be a formal and transparent procedure for developing policy on executive remuneration and for fixing the remuneration packages of individual directors. No director should be involved in deciding his own remuneration. The Remuneration Committee comprises the following three (3) Directors, all of whom are Independent Non-Executive Directors: 1. Mr Lee Ka Shao (Chairman) 2. Mr Kwok Wei Woon 3. Mr Lin, Chen Hsin The RC is governed by the RC s Terms of Reference which describes the duties and powers of the RC. The RC is responsible: (a) (b) (c) (d) (e) to recommend to the Board a framework of remuneration for the Board and key management personnel, and to determine specific remuneration packages for each Executive Director, which covers all aspects of remuneration including but not limited to Directors fees, salaries, allowances, bonuses, options, share-based incentives and awards, and benefits in kind; in the case of service contracts of Directors (if any), to review and to recommend to the Board, the terms of renewal of service contracts and to consider the compensation commitments of the service contracts in the event of early termination; in respect of any long-term incentive schemes including any share option or share scheme, to administer and to consider whether an employee or Director is eligible for the benefits under such scheme; to appoint and retain such professional consultancy firm deemed necessary to enable the RC to discharge their duties satisfactorily; and to review the Company s obligations arising in the event of termination of the Executive Directors and key management personnel s contracts of service, to ensure that such contracts of service contain fair and reasonable termination clauses which are not overly generous. The RC s recommendations are made in consultation with the Chairman of the Board and submitted to the entire Board for endorsement. Each member of RC shall abstain from voting on any resolution in respect of his own remuneration package. Also in the event that a member of the RC is related to the employee under review, he will abstain from participating in the review. ANNUAL REPORT 2016 ISR Capital Limited 15

CORPORATE GOVERNANCE STATEMENT The RC ensures that the remuneration package of the Executive Chairman is in line with the Company s compensation policy. They also consider and review the disclosure of Directors remuneration in the annual report. The RC will also ensure that the Independent Directors are not compensated excessively to the extent that their independence may be compromised. If necessary, the RC would seek professional advice internally and/or externally pertaining to remuneration of all Directors. Level and Mix of Remuneration Principle 8: The level and structure of remuneration should be aligned with the long-term interest and risk policies of the company, and should be appropriate to attract, retain and motivate (a) the directors to provide good stewardship of the company, and (b) key management personnel to successfully manage the company. However, companies should avoid paying more than is necessary for this purpose. In setting remuneration package for the Executive Chairman and the key management personnel, who are not Directors or CEO of the Company, the performance related elements of remuneration form a significant portion of the total remuneration package. This is to align their interests with those of shareholders, promote the long-term success of the Group, and to link rewards to corporate and individual performance. The RC will also take into consideration the pay and employment conditions within the industry and comparable companies. The remuneration of Non-Executive Directors will also be reviewed to ensure that the remuneration commensurate with the contribution, effort and time spent, and the responsibilities of the Directors. The Directors Fees paid to the Non-Executive Directors of the Company each year are fixed in accordance with their level of contributions, taking into account factors such as effort, time spent as well as responsibilities and obligations and subject to the approval of the Company s shareholders at the AGM. The RC is of the view that it is currently not necessary to use contractual provisions to allow the Company to reclaim incentive components of remuneration from the Executive Chairman and Key Management personnel in exceptional circumstances of misstatement of financial statements, or of misconduct resulting in financial loss to the Company and the Group. The Executive Chairman owes a fiduciary duty to the Company. The Company should be able to avail itself to remedies against the Executive Chairman in the event of such breach of fiduciary duties. Disclosure of Remuneration Principle 9: Each company should provide clear disclosure of its remuneration policies, level and mix of remuneration, and the procedure for setting remuneration in the company s annual report. It should provide disclosure in relation to its remuneration policies to enable investors to understand the link between remuneration paid to directors and key management personnel, and performance. The remuneration of the Directors for FY2016 is disclosed below. The disclosure is to enable investors to understand the link between the remuneration paid to Directors and their performance. The remuneration for the Executive Directors comprises fixed and variable components. The fixed component is in the form of fixed monthly salary whereas the variable component is linked to the performance of the Group and the individual. 16 ISR Capital Limited ANNUAL REPORT 2016

CORPORATE GOVERNANCE STATEMENT The remuneration of each Director has been disclosed in the respective bands. The Board is of the opinion that given the confidentiality of and commercial sensitivity attached to remuneration matters and to be in line with the interest of the Company, the remuneration will not be disclosed in dollar terms. The breakdown (in percentage terms) of each Directors remuneration for FY2016 are as follows: Salary* Bonus* Share Awards Other Benefits Director Fees Total % % % % % % Directors $250,000 $500,000 Ms Quah Su-Yin (1) 86 11 3 100 Below S$250,000 Mr Chen Tong (2) 100 100 Mr Kwok Wei Woon 20 80 100 Mr Lee Ka Shao (3) N/A N/A N/A N/A N/A N/A Mr Lin, Chen Hsin (4) N/A N/A N/A N/A N/A N/A Mr David Francis Rigoll (5) 96 4 100 Datuk Md. Wira Dani Bin Abdul Daim (6) 60 27 13 100 Dato Seri Krishna Kumar Sivasubramaniam (7) 21 79 100 Mr Levin Lee Keng Weng (8) 4 96 100 * Inclusive of employer s contributions to defined contribution plan (1) Ms Quah Su-Yin resigned as Chief Executive Officer and Executive Director on 31 December 2016. (2) Mr Chen Tong was appointed as Non-Independent Non-Executive Director on 27 October 2016. He was subsequently re-designated as Executive Chairman and a member of Nominating Committee on 18 November 2016. (3) Mr Lee Ka Shao was appointed as Independent Non-Executive Director, Chairman of Nominating Committee and Remuneration Committee and a member of Audit Committee on 3 January 2017. (4) Mr Lin, Chen Hsin was appointed as Independent Non-Executive Director, and a member of Audit Committee and Remuneration Committee on 8 March 2017. (5) Mr David Francis Rigoll was appointed as Non-Executive Director on 16 May 2016. He was subsequently re-designated as Executive Director on 16 June 2016 and resigned as Executive Director on 6 March 2017. (6) Datuk Md. Wira Dani Bin Abdul Daim resigned as Executive Chairman and Executive Director and a member of Nominating Committee on 15 August 2016. (7) Dato Seri Krishna Sivasubramaniam resigned as Independent Non-Executive Director, Chairman of Nominating Committee and a member of Audit and Remuneration Committees on 28 November 2016. (8) Mr Levin Lee Keng Weng was appointed as Independent Non-Executive Director and a member of Audit Committee and Remuneration Committee on 1 February 2016. He was subsequently re-designated as Chairman of Remuneration Committee on 25 February 2016. He resigned as Independent Non-Executive Director, Chairman of Remuneration Committee and a member of Audit Committee on 3 December 2016. In view of the confidentiality of the remuneration matters and given that the industry is very competitive in terms of hiring key personnel, the Board is of the opinion that it is in the best interest of the Company and the Group not to disclose the identity and remuneration bands of key management personnel in the Annual Report. In aggregate, the total remuneration paid to the top two key management personnel for the financial year ended 31 December 2016 was approximately S$526,000. The Company does not have any employee who is an immediate family member of a Director or the CEO, whose remuneration for FY2016 exceeds S$50,000. ANNUAL REPORT 2016 ISR Capital Limited 17

CORPORATE GOVERNANCE STATEMENT ACCOUNTABILITY AND AUDIT Accountability Principle 10: The Board should present a balanced and understandable assessment of the company s performance, position and prospects. The Board is responsible to provide a balanced and understandable assessment of the Company s performance, position and prospects, to its shareholders, the public and regulators. Management provides the Board with management accounts, operations review and related explanations and any other information as the Board may require together with the financial statements on a quarterly basis. The Board is accountable to its shareholders and is mindful of its obligations to furnish timely information and to ensure full disclosure of material information to its shareholders in compliance with the relevant statutory and regulatory requirements and the Listing Manual of the SGX-ST. Price sensitive information will be publicly released either before the Company meets with any group of investors or analysts or simultaneously with such meetings. Financial results and annual reports are announced and issued within the statutory prescribed periods. Risk Management and Internal Controls Principle 11: The Board is responsible for the governance of risk. The Board should ensure that Management maintains a sound system of risk management and internal controls to safeguard the shareholders interests and the company s assets, and should determine the nature and extent of the significant risks which the Board is willing to take in achieving its strategic objectives. The Board is responsible for ensuring that Management maintains a sound system of internal controls to safeguard shareholders interests and the Group s assets. The system of internal controls provides a reasonable, but not absolute, assurance that the Company will not be adversely affected by any event that could be reasonably foreseen as it strives to achieve its business objectives. The AC and the Board believe that in the absence of any evidence to the contrary and from due enquiry, the system of internal controls that has been maintained by the Group s Management and that was in place throughout the financial year and up to the date of this report is adequate to meet the needs of the Group in its current business environment. The Group has a formal Risk Management Framework for identification of key risks within the business. The Group regularly reviews its business and operational activities to identify areas of significant business risks as well as take appropriate measures to control and mitigate these risks. The Company reviews all significant control policies and procedures and highlights all significant matters to the AC and Board. The AC assists the Board in the oversight of risk management in the Group. It reviews the effectiveness of the overall risk management system in meeting sound corporate governance principles. The Group s risk management process is an ongoing process and requires continuing identification, assessment, monitoring and management of significant risks. The AC will report any material matters including findings and recommendations pertaining to risk management to the Board. 18 ISR Capital Limited ANNUAL REPORT 2016

CORPORATE GOVERNANCE STATEMENT As part of the annual statutory audit, the Group s external auditor conducted an annual review, in accordance with their audit plan, of the effectiveness of the Group s material internal controls relevant to the Group s preparation of financial statements. Any material non-compliance or failures in internal controls and recommendations for improvements are reported to the AC as part of their review. The AC also reviews the effectiveness of the actions taken on the recommendations made by the external auditor in this respect, if any. In the absence of any evidence to the contrary, it is the opinion of the Board, with the concurrence of the AC, that the risk management and system of internal controls maintained by the Group s Management that is in place throughout FY2016 and up to the date of this report provides reasonable, but not absolute, assurance against material financial misstatements or losses, and includes the safeguarding of assets, the maintenance of proper accounting records, the reliability of financial information, compliance with appropriate legislation, regulations and best practices, and the identification and containment of financial, operational, information technology and compliance risks. The Board notes that all risk management and system of internal control contain inherent limitations and no risk management and system of internal controls could provide absolute assurance against the occurrence of material errors, poor judgment in decision-making, human error losses, fraud or other irregularities. Based on the internal controls established and maintained by the Group, the work performed by the internal and external auditors and the documentation on the Group s key risks, reviews performed by Management, AC and the Board, the AC and the Board are of the opinion that the Group s risk management and internal controls, addressing financial, operational, information technology and compliance risks, were effective and adequate. This is in turn supported by assurance from the Executive Chairman and the Group Financial Controller that: (a) (b) the financial records of the Group have been properly maintained and the financial statements for FY2016 give a true and fair view of the Group s operations and finances, and are prepared in accordance with the relevant accounting standards; and they have evaluated the effectiveness of the Group s risk management and internal controls and have discussed with the Group s external and internal auditors of their reporting points and note that there have been no significant deficiencies in the design or operation of risk management and internal controls which could adversely affect the Company s ability to record, process, summarise or report financial data. The Company has disclosed that it is assisting with an investigation by the Commercial Affairs Department of the Singapore Police Force ( CAD ) in a public announcement dated 3 April 2014. In response to the on-going investigation by CAD, the Board has put in place the following measures and controls to further safeguard the shareholders interests in the Company: (a) (b) Management to notify the AC and seek AC s approval before any investment transactions are undertaken by the Group. The Group s business continuity plan should be enhanced to include identifying suitable personnel to replace any key executive or employee. On 9 December 2016, the Company has been served a joint notice dated 7 December 2016 by Monetary Authority of Singapore and CAD (collectively referred to as the Authorities ) which states that the Authorities are investigating into an offence under the Securities and Futures Act (Chapter 289) and require access to certain documents and information pertaining to the Company. ANNUAL REPORT 2016 ISR Capital Limited 19